VentureBeat

Venture-capital funding continued to rise in the fourth quarter, continuing a recent boom despite economic jitters sown by the subprime-mortgage financial mess.

VCs tossed $7 billion at startups in the fourth quarter, a substantial 12 percent rise over the same quarter last year, according to data published by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Financial. Fourth-quarter funding slumped a bit compared to the average of $7.5 billion raised in each of the first three three quarters, although it’s difficult to say at this point whether that reflects early economic nervousness or simply a seasonal Q4 slowdown in the deal flow.

Overall 2007 investment in venture firms also rose 11 percent to $29.4 billion, a six-year high. (Of course, the 2007 figure is still dwarfed by the staggering $105.1 billion that flowed into Web and genomics startups in 2000 at the height of the bubble.)

Biotech companies led in overall financing, raising $1.29 billion in the quarter — a four percent rise over last year — which let the sector narrowly edge out software, which pulled in $1.27 billion. The two sectors are effectively tied at this point, and have traded the first-place slot back and forth since mid-2006.

Medical devices also had a strong quarter with $900.7 million in funding, nearly a 35 percent increase over last year. Two of the top ten financings in the quarter were the medical-device firms Evalve , a maker of heart-valve repair kits, and Zosano Pharma, which is developing needle-free patches that deliver drugs through the skin. These companies raised $60 million and $45 million, respectively. Biotech’s sole representative in the top ten deals was Ambit Biosciences, which received $49.3 million to support its development of new cancer drugs.

Cleantech funding almost doubled over the previous year, reaching $468.7 million in the quarter — apparently a record quarter. Major deals included EverPower Renewables, which raised $55 million for wind-power farms and Serious Materials, which drew $50 million for green building materials.

It’s notable that the funding directed to early stage companies has continued to edge up over the past six years, reaching $6.3 billion in 2007. That comes against a backdrop, however, in which expansion- or late-stage companies are absorbing an increasing portion of all funding. (See the second chart at the bottom of this post.)

For a closer look, check out these lists of the top ten deals in the fourth quarter and all of 2007 (Excel spreadsheet files). If you prefer, here is a slide show of Q4 and 2007 trends (PDF), and here are the raw numbers (Excel spreadsheet).

A competing set of VC-funding numbers from Dow Jones VentureOne and Ernst & Young aren’t due out until Tuesday, but I’ll poke through them then to see if there’s any news worth reporting. Meanwhile, here are some more graphics for your weekend enjoyment.

[Updated with VentureOne/Ernst & Young data, which shows investing increased significantly during the quarter]

Venture capitalists invested robustly during the third quarter, at or near record levels since 2001, according to two surveys released last night.

So all is OK on the investing side, even if the venture capital firms themselves are showing signs of pain. Friday, news spread of yet another venture capital firm that has put its fund-raising plans on hold, because investors found its results too mediocre to justify reinvesting. The firm, Sequel Venture Partners, of Boulder, Colo, invests in health care and technology.

Venture capitalists invested $7.1 billion during the third quarter, comfortably above levels of the same quarter last year, but showing a slight drop off from $7.3 million or so pace set in the first two quarters of this year, according to data published by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Financial.

This was followed by data from VentureOne and Ernst & Young, which shows a more robust investment picture. Venture capitalists invested $8.1 billion the third quarter, up from strongly from $7.5 billion in the second quarter, and $6.3 billion the same quarter a year ago, according that survey. It was the ninth straight quarterly increase, and the highest since 2001.

The quarter saw notable increases in both the clean-tech and internet companies.

Software and life sciences remain the most heavily funded sectors, with $1.11 billion and $1.9 billion, respectively, according to the NVCA/PwC/Thomson survey. Clean-tech, however continues to draw more interest, with $844 million in investment, or an 80 percent increase compared to the second quarter of the year. Three of the top five deals this quarter were in clean-tech.

The whopper was GreatPoint Energy, of Cambridge, Mass, which raised $100 million — one of the largest deals ever for the sector. It converts coal and biogass into clean natural gas (see our coverage of the deal, announced last month), and is backed big-name investors Kleiner Perkins, Khosla Ventures and Draper Fisher Jurvetson. The only company raising more than GreatPoint was Globus Medical, which raised $110 million.

Looking more closely at the NVCA/PwC/Thomson survey, here’s a full list of the top deals for the first quarter: Download Excel file.

Silicon Valley had the most deals, as usual. For a full list of all of the Silicon Valley company fundings, by company, investors, amounts, sector, location, and stage, see this detailed file (downloads Excel). Here’s a slide show of national trends (downloads pdf), and the detailed numbers are here (Excel file).

The year is still on pace to be the biggest year for venture investments since 2001.

Internet companies got $1.1 billion, a 17 percent increase in dollars over the second quarter. Media and entertainment was hot too, with $509 million compared to $464 million in the second quarter.

The dollar value of first time deals (companies receiving venture capital for the first time) was $ 1.7 billion, which remains high compared to last year. However, seed deals in the third quarter fell 15 percent to $1.4 billion compared to the second quarter.